Predictions for 2022: Decentralized Technologies

KuppingerCole Analysts pay close attention to all topics at the intersection of identity and security. Decentralized technologies often cross paths with these domains and, since it is a dynamic and potentially disruptive influence on “business as usual”, we have compiled a few predictions about developments in 2022:

The decentralized identity market segment will continue to grow:

Decentralized identity solutions are one of the strongest use cases with solutions already on the market. There have been some interesting acquisitions, partnerships, and investments over the past two years, which promise interesting product releases in the future. Use cases include both consumer and workforce IAM, with a focus on enabling the individual to hold and consent to sharing identity info, while still enabling organizations to manage the access policies for credentials that they did not issue themselves. If you’re curious about this market space, then read this Market Compass.

Overlap between identity fraud prevention and decentralized technology will continue to develop:

An increased interest in identity verification solutions was clear this past year, as integrating identity verification into onboarding and authentication processes can mitigate risks of several different identity fraud attacks. Decentralized technology brings some unique capabilities to identity verification, especially the ability to create a reusable, verifiable identity. As both trends for reusable identities and verified identities grow, these two market segments will become more tightly-woven. This report goes into more depth, but you can expect more research on this in 2022.

The potential of Life Management Platforms will become more lucrative:

Personal security is as important as ever, and was sometimes a heavier burden to shoulder over the past two years as people worked from home on personal devices and networks, and enterprises were not always quick to secure these dynamic environments. Privacy and management of personal information is essential from the enterprise perspective as well, and enterprises do have a vested interest in handling information of employees, customers, consumers, and partners with extreme care. Decentralized technologies have always held privacy as a priority, and have had the technological methods to back it up. The market is ripe for interesting vendors to meet these needs, but will take time for the Life Management Platform market to mature.

Decentralized finance will have another bumpy year or rapid growth:

Decentralized finance (DeFi) is the natural home of decentralized technology, beginning with Bitcoin and continuing to the current investment for future use cases. Use cases like transacting, proving ownership, and storing digital assets are all made possible in a peer-to-peer setting, managed with decentralized technologies. But governing them to mitigate the unwieldly side effects of anonymous Ransomware demands, unregulated cryptocurrency trading and speculation, and exchanges with insufficient KYC procedures will continue to pose challenges next year. This market already has a high value which will continue to increase at a rapid pace, with concepts such as Central Bank Digital Currencies learning from DeFi projects.

Overall, 2022 will see increasing maturity in some markets like decentralized identity, and volatile growth in others like DeFi. However, decentralized technologies will continue to capture the attention of individuals and collaborative communities, which we hope will lead to more published and agreed upon standards to propell promising use cases forward.


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